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A year-old pact underpinning billions of dollars of transatlantic data transfers won a green light from the European Union yesterday after a first review to ensure the US protects Europeans’ data stored on American servers.

The EU-US Privacy Shield was agreed last year after everyday cross-border data transfers were plunged into limbo when the EU’s top court struck down a previous data-transfer pact in 2015 because it allowed US spies excessive access to people’s data.

That came after Austrian student Max Schrems filed a complaint in Ireland in 2013 over data transfers by Facebook Ireland to the US under the old so-called Safe Harbour data protocols.

The European Commission last month conducted its first annual review of the new framework as it seeks to ensure the US lives up to its promises to better protect Europeans’ data when they are transferred across the Atlantic – failing which it could suspend the Privacy Shield.
The Commission said it was satisfied that the framework continues to ensure adequate protection for Europeans’ personal data although it asked Washington to improve the way it works, including strengthening privacy protections contained in the US Foreign Intelligence Surveillance Act.

The conclusion will come as a relief to the more than 2,400 companies that use the scheme, including major Irish employers such as Google, Facebook and Microsoft.

The EU Commission said the US Department of Commerce should be more proactive in monitoring companies’ compliance.

“Transatlantic data transfers are essential for our economy, but the fundamental right to data protection must be ensured also when personal data leaves the European Union,” EU Justice Commissioner Vera Jourova said.
“Our first review shows that the Privacy Shield works well, but there is some room for improving its implementation,”

Companies that transfer Europeans’ personal data outside the bloc are forbidden from moving data to countries deemed to have inadequate privacy protections, unless they have special legal contracts in place.